Norway: TTS Exits Drilling Equipment Industry
- Business & Finance
Norway-based TTS Group ASA has entered into an agreement to sell its drilling equipment business, a part of TTS Energy divison, and relevant subsidiaries, to Cameron International Corporation for USD 270 million, plus a turnover based earn-out model for a three-year period.
Offshore Handling (cranes and winces), which is also a part of the TTS Energy division, is not included in the divestment. The transaction strengthens TTS Group financially and enables it to focus upon further growing and developing of the group. After the transaction, TTS Group will consist of TTS Marine, TTS P&L and Offshore Handling.
The transaction before earn out will give TTS Group a profit approximately NOK 300 million Norwegian Kroner, and is expected to close in the second quarter of 2012. The transaction is subject to customary closing conditions, including approval from the relevant competition authorities.
The divestment is an active step by TTS to participate in the on-going further developments of the drilling equipment industry, and is industrially right for both the group as whole and for its drilling equipment business unit.
“The offshore industry is moving towards larger, more integrated units, offering a broader scope of services. Cameron, with its global sale- and service network, will be a good owner and is in a better position to further develop our drilling equipment business”, says TTS President and CEO, Johannes D. Neteland.
With the divestment, TTS Group will depart the drilling equipment industry, both offshore and onshore. TTS Group will however retain and continue to develop and grow Offshore Handling (cranes and winches), which is not included in the sale.
TTS Group ended 2011 with the highest full year operating result ever, were mainly driven by the strong results in the Marine division. TTS Marine has a unique position in the Chinese and South Korean market, with valuable long term partnerships.
“We expect the shipping industry to move towards a considerable restructuring after several years of recession and TTS Group is now favorably positioned to participate in the further development”, says Johannes D. Neteland.
Source: TTS Group ASA, April 18, 2012